Part 4: Improving how the Ministry of Social Development manages debt

Ministry of Social Development: Managing the recovery of debt.

In this Part, we summarise work that the Ministry had planned or was introducing to further improve the way it recovers money it is owed. We make some suggestions for the Ministry to consider as it makes changes to its debt recovery operations.

Plans to further improve debt recovery

As we have noted in several places in Part 3, the Ministry had several initiatives to improve and refine its debt recovery work under way or planned at the time of our audit. These included:

  • assessing and improving how debt management officers contact and negotiate with former clients by telephone;
  • improving guidance and direction for negotiating payments so that debt recovery could be maximised without placing people in further hardship or giving them an incentive to return to benefits;
  • introducing reviews of existing debt repayment arrangements at appropriate times and based on the value of the debt, to ensure that the arrangement was still appropriate;
  • setting targets for money recovered that were actively managed to identify where recovery rates were below expectations so the Ministry could better target initiatives and resources;
  • making training improvements; and
  • introducing a new workflow management system to increase the Collection Unit's flexibility in carrying out debt recovery work and enable profiling of a person's ability and willingness to repay their debts. This work should enable the Collections Unit to target its recovery activities more effectively and efficiently.

The Appendix includes a summary of the current limitations and the planned improvements.

Because much of this work was still being considered or introduced at the time of our audit, it was too early for us to provide assurance on its effectiveness. However, we support the Ministry's planned improvements, and consider that its efforts to improve debt recovery work are constructive. We have made several suggestions throughout this report for the Ministry to consider as it continues to refine debt management. Our suggestions are summarised below.

Our suggestions for the Ministry of Social Development

We suggest that the Ministry:

  • review the relevance of its existing debt negotiation guidelines for Work and Income staff to ensure the consistency and appropriateness of debt repayment arrangements negotiated with current clients;
  • consider whether using dedicated or rostered debt management officers for outbound calling in the Collections Unit can improve effectiveness and efficiency in making contact with clients;
  • examine whether introducing more automation to the Collections Unit's telephone system would improve the productivity of outbound calling;
  • periodically review cases in the Monitor portfolio to verify that no new information is available that could lead to recovering these debts; and
  • consider, as data matching arrangements with other government agencies evolve, whether there is scope to get more information to help recover debt.
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